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                      eBOOKS AT THE CROSSROADS: WHICH WAY FORWARD? <br />
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                    <h5><span style="font-size: 14px; font-weight: normal;">Amazon has not been profiting on individual eBook sales. They have invested a   substantial sum in the creation of the Kindle and its platform, and they are   sustaining it with this ongoing subsidy. Amazon clearly sees enormous   potential in the eBook and eContent market, both domestically and internationally.</span><br />

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                  <h4><span style="font-size: 14px; font-weight: normal;"><strong>The Way Forward</strong></span></h4><br />
                    <h5><span style="font-size: 14px; font-weight: normal;">As the market continues to evolve, eReader functionality improves, prices drop   and user adoption increases, there will be heightened urgency to remain ahead of   a fast-changing curve. Future eBook functionality will require rich and   descriptive data mark-up and metadata, and with greater eContent interactivity   and disaggregation potential, digital rights should contain or wrap content at a   pre-determined granular level. The more clearly and descriptively   content is labeled, the more portable and valuable it will be. Now, more than   ever, an eBook operating model based on flexibility that incorporates thought-   and technology-leadership is imperative.<br />
                        <br />
Characterized by explosive growth, massive investment and media buzz, the eBook market has become one of the most potentially lucrative places for publishers to explore. Publishers have arrived at a crossroads, with three viable options before them for capitalizing on the eBook market while it continues to evolve.<br />
<br />
For publishers, content owners or licensors, a strategy of direct   partnership with suppliers that offer quick-time-to-market seems simple.   However, in such a quickly changing and volatile market, how can publishers   remain continually attuned to developments on each platform, as well as the many   devices each supports? Platforms may further complicate matters by trying to   force publishers into exclusivity agreements or by promoting their devices over   their competitors’ devices. Publishers and information services companies that   choose this route will have to carefully monitor technology developments and   involve themselves in complex DRM issues to manage their businesses   successfully, depending on the strategies they adopt.<br />
<br />
Creating and   maintaining an internal conversion and distribution facility promises greater   control over the eBook process and less dependence on platforms and other third   parties. There are significant disadvantages, however. Publishers and   information services companies will have to invest significantly in an initial   conversion set-up and then adapt that set-up continuously to meet new needs.   This tweaking and updating will add to the overall cost, as will licensing and   staffing, and will reduce the publishers’ resources and focus from key   areas.<br />
<br />
Partnership with an expert provider is the more reliable and   flexible option, because it will maximize publishers’ flexibility by keeping   them independent of specific platforms and conversion work. This is also the   most cost-effective method. Publishers and information services companies will   be able to focus on their core business, while relying on the partner both to   stay abreast of technology and market trends and handle the conversion and data   management with leading practices. In addition to providing publishers with the   necessary agility, a trusted partner will closely monitor the changing pricing   and DRM models and provide sound guidance.<br />
<br />
The eBook market is replete   with unknowns. Publishers must retain their agility while being continually   attuned to myriad developments impacting eReaders, eBook platforms, eContent,   cost and margins. Publishers and information services companies that work with a   capable intermediary will increase their flexibility and best position   themselves to succeed in the emerging eBook market.</span></h5> 
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